IPH Limited (ASX:IPH) Managing Director David Griffith discusses the company's further expansion into Asia.
IPH Limited (ASX:IPH) Managing Director, David Griffith Presents at the ASX CEO Sessions in Sydney
IPH Limited (ASX:IPH) is the holding company of a series of patented Trademark Attorney firms. Spruson & Ferguson, Fisher Adams & Kelly Callinans, Pizzeys, Cullens and a big data analytics firm called, Practice Insight. Patented and Trademark Attorney firms, which is the core of our business, provide traditional services to obtain intellectual property rights, fundamentally patented trademarks on behalf of clients, from governments in various countries.
The worldwide market is many billions of dollars. We’re interested in the secondary markets. That is everything outside the United States, Japan and Western Europe. So our market is Asia, South America, Africa, Australia and the Eastern Bloc countries. So it does run to some billions of dollars.
As the Asian region becomes more economically important to the world, the people that generate intellectual property rights in the USA, Japan and Europe are more interested in getting rights in these regions. So there’s more growth in these countries than there are in more mature markets. So we are in a perfect position to service it, being proper-patented attorneys, which is a profession that never really existed in Southeast Asia.
In the half-year results, we had a profit of $23.5 million, interim dividend of 11 cents per share, double-digit growth and with a big tail wind from currency. But underlying earnings per share was up substantially. We did a capital raising in November, raising $111 million from an SPP, an institutional raising. So we’re sitting there now with about $70 million in the bank and $100 million debt facility from the ANZ, which is undrawn.
Our acquisition performed really well, we’re happy to be with them, the people are fantastic. With all acquisitions there’s a bit of, I wouldn’t say teething problems; they’re coming on board. Their profitability’s great and they’re learning we’re being able to pull more costs out, and get the synergies of the cases that they sent to Asia, are now going to our operations in Asia.
So we get additional synergies from work that was otherwise going to competitors. We have a long pipeline of acquisitions covering many countries in the secondary market. So I think that they all take a little bit longer than expected, but I’m sure by the end of this year, we’ll have a substantially increased footprint.
We have this exciting acquisition pipeline, which will see us with a much bigger presence in China. We already have one person there, but we will have possibly many dozens of people in China offering our services to our existing client base. That’s the big whale for us, but we will also have increased presence through organic and acquisition growth in Southeast Asia, and the Eastern Bloc countries.